European Energy & Utilities Credit Conference 2017

Transcription

1 European Energy & Utilities Credit Conference 207 Clemens Eder Group Treasurer & Chief Risk Officer London, November 2, 207 Value creation through performance OMV Aktiengesellschaft

2 Disclaimer This presentation contains forward looking statements. Forward looking statements may be identified by the use of terms such as outlook, believe expect, anticipate, intend, plan, target, objective, estimate, goal, may, will and similar terms, or by their context. These forward looking statements are based on beliefs, estimates and assumptions currently held by and information currently available to OMV. By their nature, forward looking statements are subject to risks and uncertainties, both known and unknown, because they relate to events and depend on circumstances that will or may occur in the future and are outside the control of OMV. Consequently, the actual results may differ materially from those expressed or implied by the forward looking statements. Therefore, recipients of this report are cautioned not to place undue reliance on these forward looking statements. Neither OMV nor any other person assumes responsibility for the accuracy and completeness of any of the forward looking statements contained in this presentation. OMV disclaims any obligation and does not intend to update these forward looking statements to reflect actual results, revised assumptions and expectations and future developments and events. This presentation does not contain any recommendation or invitation to buy or sell securities in OMV. 2 OMV Group, European Energy & Utilities Credit Conference, London, November 2, 207

3 OMV an international, integrated oil and gas company Upstream Downstream Oil 3 refineries with a capacity of 7.8 mn t Total refined product sales of 20 mn t ~2,00 filling stations in 0 countries Four core regions: CEE, Norway, Middle East and Africa, Russia Production 206: 3 kboe/d (~50% oil, ~50% gas) P reserves at year-end:.03 bn boe (reserves life of ~9 years) ~90% of production in EU and OECD countries Downstream Gas Natural gas sales volumes of 09 TWh in Europe Gas pipeline network in Austria Gas storage capacity of 30 TWh in Austria, Germany Figures from 206 Excluding OMV Petrol Ofisi. 3 OMV Group, European Energy & Utilities Credit Conference, London, November 2, 207

4 OMV delivers on strategy PORTFOLIO RESHAPING COST DISCIPLINE STRONG CASH FLOW DIVIDEND Yuzhno Russkoye deal in progress as planned Signed asset swap with Gazprom Sold Upstream OMV (U.K.) Limited Closed sale of OMV Petrol Ofisi Signed financing agreements for Nord Stream 2 Upstream production cost below USD 9/boe Cost savings of EUR 200 mn achieved in cost savings target of >EUR 250 mn versus 205 on track Free cash flow break-even decreased to 35 USD/bbl in 206 Strong operating cash flow in 9m/7, fully covering investments and increased dividend payments Free cash flow after dividends 2 9m/7: EUR 2.5 bn Dividend Per Share of EUR.20 for 206 (+20% compared to 205) OMV aligned the production cost definition with its industry peers. Starting with Q/7, administrative expenses and selling and distribution costs are excluded. 2 Free cash flow after dividends including non-controlling interest changes 4 OMV Group, European Energy & Utilities Credit Conference, London, November 2, 207

5 Strategic steps towards building sustainable Upstream portfolio Divestments Acquisitions Scaled down exposure in high-cost regions (e.g. UK Upstream) Reduced exploration activities in non-core region Sub-Sahara Africa Strengthened strategic partnerships Signed acquisition of 24.99% in Yuzhno Russkoye gas field Signed binding asset swap agreement with Gazprom Extended operations in Libya Reserve Replacement Rate of more than 00% for 5 years Gazprom National Oil Corporation of Libya, ADNOC Considering the acquisition in the Yuzhno Russkoye field and based on OMV production levels from OMV Group, European Energy & Utilities Credit Conference, London, November 2, 207

6 Optimized Downstream portfolio Gas sales business Gas transportation business Acquired, restructured and integrated gas sales and trading businesses (renamed OMV Gas Marketing & Trading) Started gas sales in Germany Signed financing agreements for Nord Stream 2 Reduced exposure in regulated Gas business by selling 49% share in Gas Connect Austria Downstream Oil Closed divestment of OMV Petrol Ofisi to Vitol Group OMV to acquire 40% stake in Smatrics, Austria s leading full-service provider of e-mobility solutions 6 OMV Group, European Energy & Utilities Credit Conference, London, November 2, 207

7 Balanced portfolio results in strong and resilient cash generation Cash generation Sources of funds in EUR bn >3bn EUR Downstream Upstream Other (0.3) (0.3) 0.0 (0.) (0.2) Brent in USD/bbl OMV Group, European Energy & Utilities Credit Conference, London, November 2, 207

8 Financial resilience: oil price free cash flow break-even lowered Brent oil price free cash flow break-even OMV Group, in USD/bbl Free cash flow break-even decreased to 35 USD/bbl ~70 (50)% Significant reductions in CAPEX, cost and stringent focus on cash generation Free cash flow after dividends excl. proceeds from divestments of non-current assets: ~35 205: EUR (656) mn 206: EUR 356 mn Brent oil price sensitivity on OMV Group in 206: USD +/bbl: EUR +35 mn operating cash flow Calculation of the oil price cash flow break-even: free cash flow after dividends excl. Proceeds from sale of non-current assets and Net impact from the sale of subsidiaries and businesses, net of cash disposed adjusted for proceeds from disposal of fixed assets (i.e. securities, loan repayments) excl. the share in the Gate terminal in OMV Group, European Energy & Utilities Credit Conference, London, November 2, 207

9 Free cash flow after dividends of EUR 2.5 bn Organic free cash flow of EUR bn Sources and uses 2 of cash in 9m/207 in EUR bn ,5 Free cash flow after dividends 9m/207 Strong cash flow form operating activities of EUR 2.7 bn 9m/207 (Q3/7: EUR 0.8 bn) Proceeds from divestments of EUR.8 bn (Q3/7: EUR 75 mn) UK Upstream division, OMV Petrol Ofisi, Ashtart Tunisia.7 Cash outflow for acquisitions of EUR 0.3 bn, mainly related to Nord Stream 2 (Q3/7: EUR 7 mn) 2.7. Cash outflow for investments of EUR. bn (Q3/7: EUR 38 mn) Sources Divestments minus acquisitions Cash flow from operating activities 0.6 Uses Cash flow for investments Annual dividends Payment of OMV s annual dividend of EUR.2/share; 20% higher vs. last year Free cash flow after dividends of EUR 2.5 bn (Q3/7: EUR 0.5 bn) Cash flow from operations minus investments and dividends 2 Sources and uses excluding financing activities 9 OMV Group, European Energy & Utilities Credit Conference, London, November 2, 207

10 Strict cost discipline Upstream production cost in USD/boe CAPEX 2 in EUR bn Cost-savings program 3 in EUR mn 3.2 (33)% -33% ~(39)% -39% > ~.7 ~0.6. 9m m/ Target Starting with 206, administrative expenses and selling and distribution costs excluded 2 CAPEX guidance including capitalized Exploration and Appraisal expenditures and excluding acquisitions 0 OMV Group, European Energy & Utilities Credit Conference, London, November 2, On comparable basis with 205

11 Very strong performance in 207 Clean CCS Operating Result in EUR mn,737,535 2, Upsteam Clean CCS net income attributable to stockholders in EUR mn,48 995,257 Clean CCS earnings per Share in EUR ,44 Downstream m/ m/ m/7 Cash flow from operating activities in EUR mn 2,834 2,878 2,706 Free cash flow after dividends incl. non-controlling interest changes in EUR mn 2,545 Dividend per Share in EUR.00.20, m/7 (58) m/7 Note: Consolidation, Corporate & Other Operating Result are not depicted in the charts; figures on this and the following slides may not add up due to rounding differences. In 206 non-controlling interest changes mainly include the proceeds from divesting the 49% minority stake in Gas Connect Austria OMV Group, European Energy & Utilities Credit Conference, London, November 2, 207

12 Financial steering framework of OMV Shareholder return and stable rating Value + Cash KPI ROACE Free Cash Flow Focus Strength of balance sheet Growth in profitability Principles Operational efficiency Capital efficiency Financing/Cash efficiency Future oriented portfolio management 2 OMV Group, European Energy & Utilities Credit Conference, London, November 2, 207

13 Credit ratings Commitment to strong investment grade credit profile enhances the Group s high level of transparency with investors June 2, 207 Senior unsecured: Baa, outlook stable May 8th, 207 Senior unsecured: A-, outlook stable 3 OMV Group, European Energy & Utilities Credit Conference, London, November 2, 207

14 Significant deleveraging and strong cash position Net Debt development in EUR bn Strong liquidity position as of Q3 207 Further reduction of net debt to EUR 0.4 bn Cash position at EUR 4.6 bn Committed revolving credit facilities of EUR 3.5 bn (undrawn) Target long-term gearing ratio 30% Dec 3, 205 Dec 3, 206 Mar 3, 207 Jun 30, 207 Sep 30, 207 Gearing ratio in % 28% 2% 2% 7% 3% 4 OMV Group, European Energy & Utilities Credit Conference, London, November 2, 207

15 Funding activities of the last years Date of issue Bond Amount Coupon Maturity November 204 Eurobond (XS ) EUR 750,000, % fix /9/208 November 203 Eurobond (XS ) EUR 500,000,000.75% fix /25/209 February 200 Eurobond (XS ) EUR 500,000, % fix 02/0/2020 October 20 Eurobond (XS ) EUR 500,000, % fix 0/2/202 September 202 Eurobond (XS ) EUR 750,000, % fix 09/27/2022 September 202 Eurobond (XS ) EUR 750,000, % fix 09/27/2027 June 20 Hybrid bond (XS ) EUR 750,000, % fix until first call date December 205 Hybrid bond (XS ) EUR 750,000, % fix until first call date December 205 Hybrid bond (XS ) EUR 750,000, % fix until first call date Perp-NC7/2 Perp-NC6 Perp-NC0 Undrawn revolving credit facilities of OMV Group: EUR 3.5 bn 5 OMV Group, European Energy & Utilities Credit Conference, London, November 2, 207

16 Targeting a long-term gearing ratio of 30% Debt maturity profile in EUR mn,200, Debt EUR 5.09 bn Cash EUR 4.64 bn Net debt EUR 0.45 bn Debt breakdown USD: 5% Gearing ratio 3% Variable: 8% EUR: 95% ff Fixed: 82% Money Market Multilateral/Syndiacted Loan Senior Bond Term / Shareholder Loan Net debt as of end September OMV Group, European Energy & Utilities Credit Conference, London, November 2, 207

17 OMV Vision 2020 We are the energy for a better life Restructuring Streamlined portfolio Integrated gas sales and trading businesses Achieved > EUR 200 mn cost savings Significantly reduced the oil price free cash flow breakeven Value added growth Upstream Growing in low-cost regions with rich hydrocarbon reserves Optimize operating assets Improve value with a risk-balanced portfolio Achieve RRR 00% Gas: Expand European gas sales business to monetize OMV s supply position Oil: Extend refinery value chain towards higher value products Leverage on strong partnerships OMV in 2020 OMV is producing and marketing oil & gas, innovative energy and high-end petrochemical solutions in a responsible way Financial discipline 7 OMV Group, European Energy & Utilities Credit Conference, London, November 2, 207

18 OMV Aktiengesellschaft

19 BACK-UP OMV Aktiengesellschaft

20 More favorable macro environment - in particular a significant uplift of refining margins Oil price Brent in USD/bbl OMV indicator refining margin in USD/bbl Q3/6 Gas prices in EUR/MWh Q4/6 Q/7 Q2/7 Q3/7 0 Q3/6 Q4/6 Q/7 Ethylene/propylene net margin 2 in EUR/t Q2/7 Q3/ Realized gas price (Upstream) Central European Gas Hub Q3/6 Q4/6 Q/7 Q2/7 Q3/7 0 Q3/6 Q4/6 Q/7 Q2/7 Q3/7 Note: All figures are quarterly averages Converted to MWh using a standardized calorific value across the portfolio ethylene/propylene and naphtha including standard processing consumption 20 OMV Group, European Energy & Utilities Credit Conference, London, November 2, Spread between market prices of

21 Strong Group Clean CCS Operating Result in Q3 207 driven by Upstream and higher refining margins Clean CCS Operating Result in EUR mn Downstream Upstream Corporate & Others Clean CCS net income attributable to stockholders in EUR mn Clean CCS Earnings Per Share in EUR Q3/6 Q2/7 Q3/7 Q3/6 Q2/7 Q3/7 Q3/6 Q2/7 Q3/7 2 OMV Group, European Energy & Utilities Credit Conference, London, November 2, 207

22 Significant increase in Group Operating Result Operating Result in EUR mn Downstream Corporate & Others Upstream Net income attributable to stockholders in EUR mn Earnings Per Share in EUR , ,5 (36) (857) Q3/6 (694) Q2/7 Q3/7 Q3/6 (.028) Q2/7 Q3/7 Q3/6 (3,5) Q2/7 Q3/7 22 OMV Group, European Energy & Utilities Credit Conference, London, November 2, 207

23 Upstream: Higher contribution from Norway and restart of Libyan production Clean CCS Operating Result in EUR mn 4 Q Market effects 6 Operational effects DD&A 2 90 Pearl settlement 300 Q3 207 Q3 207 vs. Q3 206 Higher oil and gas prices, partially offset by weaker USD Realized oil price increased by 9% Realized gas price rose by % Hedging gains lower by EUR 7 mn in Q3 207 Strong production of 34 kboe/d (+40 kboe/d) Production ramp-up in Libya (+28 kboe/d) Norway (+22 kboe/d) due to Gullfaks shut-in in Q3 206 and increase of Edvard Grieg production Sales increase by 4% mainly due to Libya Lower costs mainly in Norway Lower depreciation reflecting a decreased asset base and positive reserve revisions EUR 90 mn net impact to OMV from Pearl settlement with Kurdistan Regional Government of Iraq Market effects defined as oil and gas prices, foreign exchange impact, price effect on royalties and hedging 2 Depreciation, Depletion and Amortization 23 OMV Group, European Energy & Utilities Credit Conference, London, November 2, 207

24 Oil Gas Downstream: Exceptional refining margins and high utilization rate more than offset OMV Petrol Ofisi divestment Clean CCS Operating Result in EUR mn Q Market effects 76 Operational effects OMV Petrol Ofisi divestment impact Borealis contribution 4 DD&A Q3 207 Q3 207 vs. Q3 206 Oil Almost double refining margin (+9%) and improved ethylene/propylene net margin (+6%) Very high refinery utilization rate (96%) Retail sales 3 increased, while margins 3 slightly declined Lower commercial sales 3 and margins Unrealized hedging losses OMV Petrol Ofisi divested on June 3, 207 Lower Borealis contribution due to weaker polyolefin margins Gas Increased natural gas sales in Germany and Turkey Significantly improved power business due to higher output and spark spreads EUR 7 mn insurance revenue for Brazi power plant outage Lower Gas Connect Austria result by EUR 3 mn One-time gain in Q3 206 of EUR 22 mn Market effects defined as refining indicator margin, petrochemical margins and spark spreads 2 Depreciation, Depletion and Amortization 3 excluding OMV Petrol Ofisi 24 OMV Group, European Energy & Utilities Credit Conference, London, November 2, 207

25 Major achievements in reshaping OMV s portfolio Sale of 30% in Rosebank; USD 50 mn received in Q4/6 Sale of a 49% stake in Gas Connect Austria; EUR 0.6 bn received in Q4/6 Sale of Aliaga terminal in Turkey Divestment of OMV UK Upstream subsidiary; cash contribution of up to USD ~ bn Divested OMV Petrol Ofisi net cash contribution of EUR 0.9 bn Sale of Ashtart field in Tunisia April 206 May 206 Nov 206 Dec 4, 206 March 5, 207 Oct 6, 206 Dec 5, 206 Dec 30, 206 Jan 3, 207 June 3, 207 August 2, 207 Acquisition of unmanned filling stations in Austria Takeover of EconGas Acquisition of remainder 2nd Party Shares in 4 Sirte basin EPSAs in Libya Binding basic agreement on asset swap between Gazprom and OMV signed Signed acquisition of 24.99% in Yuzhno Russkoye gas field for USD.85 bn Divestments Investments EPSAs: Exploration and Production Sharing Agreements. 25 OMV Group, European Energy & Utilities Credit Conference, London, November 2, 207

26 Asset swap between Gazprom and OMV is progressing well Project status Signing of final transaction expected by mid-207 Closing expected by end of 208 Investments 40% of total EUR 900 million CAPEX to be invested for 207 and 208 after closing Leverage on already built infrastructure and pipeline system of Achimov I and II Take-or-pay agreement Pricing structure: ~70% gas - partly sold at Russian domestic prices; remainder sold at European netback prices by the Joint Venture. ~30% condensate with better margins than gas Will be shown in the income statement as equity-accounted investment Urengoy, Russia. Source: Gazprom 26 OMV Group, European Energy & Utilities Credit Conference, London, November 2, 207

27 Yuzhno Russkoye: among the largest gas fields in Russia OMV acquired 24.99% participation in Yuzhno Russkoye natural gas field from Uniper SE The purchase price amounts to USD.85 bn (EUR.75 bn ) plus cash on the balance sheet as of December 3, 206 The economic effective date is January, 207 Closing of the transaction expected by year-end 207 World class field with stable production and cash flow profile Transaction strengthens strategic partnership with Gazprom Yuzhno Russkoye, Russia. Source: Gazprom Based on an agreed exchange rate of EUR = USD OMV Group, European Energy & Utilities Credit Conference, London, November 2, 207

28 Yuzhno Russkoye: an attractive acquisition for OMV Yuzhno Russkoye versus 2P reserve acquisition multiples in recent Russian asset deals Acquisition price, USD//boe of 2P 4,0 3,5 3,0 2,5 2,0,5,0 0,5 0,0 BP - 20% of Taas-Yuryakh ONGC - 5% of Vankor Silk Road Fund - 9.9% of Yamal LNG Oil India, Indian Oil Corp., Bharat Petro % of Taas-Yuryakh Oil India, Indian Oil Corp., Bharat Petro % of Vankor ONGC - % of Vankor Beijing Gas / 20% of VerkhnechonskNG Yuzhno-Russkoye Yuzhno Russkoye versus production multiples in recent Russian asset deals Acquisition price, USD/boe of production BP - 20% of Taas-Yuryakh ONGC - 5% of Vankor Oil India, Indian Oil Corp., Bharat Petro -Oil India, Indian Oil Corp., Bharat Petro % of Taas-Yuryakh 23.9% of Vankor Analysis source: Lambert Energy Advisors ONGC - % of Vankor Beijing Gas / 20% of VerkhnechonskNG Yuzhno-Russkoye 28 OMV Group, European Energy & Utilities Credit Conference, London, November 2, 207

29 Russia becomes one of OMV s core Upstream regions OMV production contribution from Russian fields in kboe/d Urengoy, Russia. Source: Gazprom Achimov IV/V Yuzhno Russkoye Novy Port Achimov Urengoy Yuzhno Russkoye Stable production flow for a very long period of time Production of ~50 kboe/d will be reached in 2025 Achimov IV/V and Yuzhno Russkoye add more than bn boe to OMV s reserves Cash inflow from Yuzhno Russkoye (dividends of approx. USD 200 mn p.a. mid-term) will be used to fund the capital needs of Achimov IV/V Location of the field is indicative OMV s indicative view on production profiles; 2 OMV production contribution from Yuzhno Russkoye booked upon closing, expected by end 207; corresponding economic effect as of January, OMV Group, European Energy & Utilities Credit Conference, London, November 2, 207

30 OMV keeps a risk balanced portfolio Size of Russian assets in OMV Group s average capital employed 206 basis, in EUR bn ~5% Russian assets (Yuzhno Russkoye and Achimov IV/V) 206 OMV Group Average Capital Employed Gazprom reliable local partner Business experience of OMV s CEO with Gazprom extends over a decade Yuzhno Russkoye field has consistently produced above plan JV partners from Yuzhno Russkoye received dividends in a timely manner every year Modern infrastructure with high availability; no unplanned shutdowns Stable production of natural gas according to take-orpay agreement Based on transaction values 30 OMV Group, European Energy & Utilities Credit Conference, London, November 2, 207

31 OMV in Libya: Operations restarted OMV operations in Libya OMV restarted production in Murzuq and Sirte basins in 206 Expansion of capacity OMV increased stake in four Exploration and Production Sharing Agreements in the Sirte Basin (C03, NC29/74, C02 and Nafoora Augila) OMV now holds 0% in Nafoora Augila and 2% in remaining blocks Expansion of production capacity from 30 kbbl/d to 40 kbbl/d Increase of 2P developed reserves by 52 mn bbl In the second half of 207, production in Libya is forecasted to be above 20 kbbl/d (9m/7: 23 kbbl/d) Strategic fit in Upstream portfolio Production increase at very attractive costs OMV s proven technological capabilities in operating mature fields OMV purchases Libyan crude for use in its refineries 3 OMV Group, European Energy & Utilities Credit Conference, London, November 2, 207

32 OMV Petrol Ofisi divestment closed Closed divestment of OMV Petrol Ofisi to Vitol Group on June 3, 207 Overall transaction value of EUR.4 bn Important step in the implementation of OMV s corporate strategy 32 OMV Group, European Energy & Utilities Credit Conference, London, November 2, 207

33 Impact of OMV Petrol Ofisi sale in OMV Downstream Oil financials 206 OMV Downstream Oil 206 OMV Downstream Oil excl. OMV Petrol Ofisi Impact of OMV Petrol Ofisi sale Total refined product sales (mn tons) thereof retail sales (mn tons) Number of filling stations 3,777 2,068 Average throughput per station (mn liters) Clean CCS EBIT (EUR mn),22,006 Operating Cash Flow (EUR mn),769,640 Free cash flow before dividends (EUR mn),277,240 Clean CCS RONA (%) 6% 8% (35)% (42)% (45)% +6% (0)% (7)% (3)% +2 pp Free Cash Flow figure is defined as net cash from operating activities, including Net Working Capital movements and excluding financing costs, and net cash used in investing activities 33 OMV Group, European Energy & Utilities Credit Conference, London, November 2, 207

34 Nord Stream 2: Improvement of energy security in Europe Nord Stream 2 pipeline Nord Stream km long sub-sea gas pipeline from Russia to Germany Total project costs of EUR 9.5 bn Development starts in 208 and is planned to finish by 209 Gazprom 00% owner of Nord Stream 2 AG Baumgarten OMV agreement OMV has signed financing agreements with Nord Stream AG together with Shell, Uniper, Wintershall and Engie OMV agreed to provide long term financing for up to 0% of the total cost of the project 34 OMV Group, European Energy & Utilities Credit Conference, London, November 2, 207

35 New dividend policy Dividend per share in EUR,00,0,20,25,25,00,20 We are committed to delivering an attractive and predictable shareholder return through the business cycle Floor dividend of EUR per share projected, provided that this will not be to the detriment of the Company s long-term financial health or stability Yield 3.2% 4.68% 4.39% 3.59% 5.68% 3.83% 3.58% Oil price Brent in USD/bbl OMV intends to grow the cash dividend progressively, in line with the Group s free cash flow and net income development Rate of progression will take into account the Group s investment needs and strategic capital allocation priorities 35 OMV Group, European Energy & Utilities Credit Conference, London, November 2, 207

36 Sensitivities of OMV Group in 207 FY 207 impact in EUR mn Operating Result Operating cash flow Brent oil price (USD +/bbl) Gas price (EUR +/MWh) OMV indicator refining margin (USD +/bbl) Petrochemicals margin (EUR +0/t) EUR-USD (USD appreciates by USD 0.0) Excluding at-equity accounted investments 2 CEGH/NCG sensitivity applied to Austria and Norway 3 Ethylene/propylene net margin Note: Materially different Brent and FX levels (vs. current levels) would lead to different sensitivity results. 36 OMV Group, European Energy & Utilities Credit Conference, London, November 2, 207

37 Updated Outlook Outlook 207 Brent oil price (USD/bbl) CEGH gas price (EUR/MWh) 5 >5 Total hydrocarbon production (kboe/d) 3 >330 (Previous: 330) OMV indicator refining margin (USD/bbl) 4.7 >4.7 Ethylene/propylene net margin (EUR/t) 375 >375 Utilization rate refineries 89% >90% CAPEX (EUR bn) 2.9 ~.7 (Previous:.8) E&A expenditures (EUR mn) 307 <300 (Previous: 300) Cost savings vs. 205 (EUR mn) >250 Including production from Pearl Petroleum Company 2 Including capitalized Exploration and Appraisal expenditures and excluding acquisitions 3 On a comparable basis 37 OMV Group, European Energy & Utilities Credit Conference, London, November 2, 207